China’s first national fund management association, the China Securities Investment Fund Association, or CFA, has been launched after more than a year of preparation, at a time when the country’s regulators continue to ease barriers to entry for foreign investors.

The CFA was launched this month with the support of the China Securities Regulatory Commission. It has more than 100 members, including fund management companies, custodian banks and securities exchanges.

The CFA is headed by Sun Jie, the CSRC’s former director of investment fund supervision. According to Z-Ben Advisors, a consulting firm based in Shanghai, the CFA is similar in structure to the Securities Association of China – a non-profit, self-regulating organisation guided by the CSRC.

The association will promote self-regulation and bridge the gap between the government and mutual fund organisations. Z-Ben said the regulator was working to promote transparency and maintain fair competition against a backdrop of increasing assets under management in the country, and said its backing of the CFA was a “clear demonstration of this”.

In his speech, Guo Shuqing, chairman of the CSRC, asked fund managers to provide better wealth management and a broader range of investment management services.

According to Z-Ben Advisors, he suggested that mutual fund companies speed up business innovation and establish dedicated asset management schemes to provide direct financing to the real economy. He also said segregated accounts’ investment scope should be expanded.

The calls and the new association come as the CSRC further opens the Chinese markets to foreign institutional investors.

In April, the CSRC expanded the country’s qualified foreign institutional investor, QFII, quota by $50bn, meaning an approved list of foreign investors could now collectively invest up to $80bn in domestic securities.

According to data from the CSRC on April 4, QFII licences had been granted to 158 overseas institutions from 23 countries and regions, the majority of which are asset management companies.
Currently, a total of $24.6bn has been granted to 129 QFII-approved institutions.

The CSRC said an expanding economy and growing capital market in China had increased demand from foreign institutional investors to enter the market, leading to the decision to further increase the QFII quota. It said it would adopt further measures to open the financial market “so that more overseas long-term capital will be attracted to China’s capital market”.